Long term effects of the trade war potentially disastrous for U.S. economy

LAUREN KAY CHIARADIO

The trade war between the United States and China began on March 8, when Donald Trump signed an executive order creating tariffs on steel and aluminum products. Since then, over six months have passed and the country is beginning to see the long-term effects.

According to Dr. Megan Regan, Associate Professor of Economics currently on leave as a visiting professor at Wake Forest University, the United States is now facing “tit-for-tat retaliation for our new trade policies.”

She refers to China’s refusal to import ninety-four percent of soybeans, a perishable crop now rotting on the fields. The question now is how badly will the inability to export these crops affect the companies and farmers growing them?

As long as the tariffs on steel and aluminum continue, China and other nations will likely continue to penalize us economically. Because of this uncertainty, there is a likelihood the stock market will grow unstable, as it does when any big change occurs in the United States.

However, according to Dr. Regan, economists have also been predicting a recession to hit next fall. The combination of the recession, the uneasy stock market, and trade policy targeting the US economy could be catastrophic. When asked how catastrophic, Dr. Regan answered that these trade policies could be the “end of the American empire” as we know it.

Simply speaking, these policies, in combination with the potentially uneasy stock market and recession, could cause a stock market crash bad enough to send us into a depression.

In addition, a general distrust of the United States government could lead to a failure of policy implementation to fix these damages, transforming the nation we live in. The best chance to avoid such a crash would be to end the current trade policies as quickly as possible.

As for congressional intervention, there is little hope. “The legislature could pass policy… if we had a different legislature that had the ability to overturn a veto,”said Dr. Elizabeth Wemlinger, Assistant Professor of Political Science and Public Policy.

Even with a now democratic house, a policy ending tariffs would be unlikely to pass as Trump would likely veto it, and the current legislature would be unable to gain the two-thirds vote needed to overturn such a veto.

In the end, it appears that Trump alone has power over these tariffs and therefore the American economy as a whole is in his control.